A new lawsuit alleges that the PayPal-owned browser extension, Honey, cheated its creators out of money. Honey, which was acquired by PayPal for $4 billion in 2019, can be used to automatically provide relevant coupon codes while shopping. However, in a video posted last month, YouTuber MegaLag described Madu as a “scam” that “steals money from influencers.” Among other allegations, MegaLag says that when YouTubers or other creators promote products through affiliate links, if viewers have installed Honey, the extension will secretly replace the link when viewers buy — even if Honey doesn’t provide it. any discount. That means Madu, not the creator, receives affiliate revenue for the transaction. Now Devin Stone, a Washington, DC-based attorney who posts videos on the popular YouTube channel LegalEagle, has filed a lawsuit against PayPal, claiming that the company “systematically diverts commissions from rightful owners, destroying the affiliate marketing system.” “Adding to the irony, PayPal asked content creators and influencers to promote the Madu browser extension to their audience, effectively capturing commissions and other benefits generated by those same creators,” Stone said in the lawsuit. TechCrunch has reached out to PayPal for comment. The company shared a statement with The Verge saying it denies the allegations and will defend itself “very vigorously,” adding that “Honey follows industry rules and practices, including last click attribution” (an ad attribution system where the last touch point gets all the credit to buy). Of course, Stone also published a video about the lawsuit, which also emphasizes Honey’s marketing efforts, where the creators promote the browser extension to the audience – and after the audience has installed it, Stone says that it is like a “sleeping leech” in the browser, “Wait viewer to do the transaction.” “Thus, forever, the sponsorship that the creator will have and the affiliate relationship and advertising in the future has decreased because the creator’s audience has been infected,” he said. Stone added that he is seeking class-action status for the lawsuit and is looking for other creators to join.
